What to watch this week in Congress — D.C. city council chair to release revamped tax cut proposal — Paulson calls for a carbon tax

By Mackenzie Weinger

06/23/14 10:02 AM EDT

With an assist from Brian Faler

WHAT TO WATCH THIS WEEK IN CONGRESS. It’s crunch time for the Senate Finance Committee. Lawmakers have repeatedly said they want to formally take up a plan to patch a budget hole in the highway trust fund by their July 4 recess — which means it has to happen this week. Nothing yet has been scheduled, and chairman Ron Wyden last week stopped short of saying a markup will definitely occur, only saying that’s his “goal.” Negotiations have been slow over where to find the roughly $10 billion needed to keep the program humming through the rest of this year.

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Even if the panel can agree on a plan, there is still the no-small-matter of House Republicans. Speaker John Boehner said last week they want a somewhat longer extension than Finance is considering, one running perhaps as long as a year, which would mean finding even more payfors. House Republicans want to take the savings out of the postal service, an idea Wyden has repeatedly called a “headscratcher.”

D.C. CITY COUNCIL CHAIR TO RELEASE REVAMPED TAX CUT PROPOSAL. D.C. City Council chairman Phil Mendelson aims to release today a revised tax cut plan that’s likely to clear the panel on Tuesday. He was forced to revise plans to slice the district’s individual, business and estate taxes after the city’s chief financial officer said the projected revenue losses would throw the district budget out of whack. Mendelson says he doesn’t plan any substantive changes to cuts the council considered last month, saying he will instead add triggers so that many of the reductions will only take effect if tax receipts exceed projected levels.

IT’S MONDAY! And welcome back to Morning Tax, where your host will be spending much of the week obsessing over the various scenarios that would mean the US advances in the World Cup. If you want to talk taxes, you can find me at mweinger@politico.com or on Twitter at @ mweinger. As always, please follow @ POLITICOPro and @ Morning_Tax.

HOUSE: Meets at 12 p.m.

SENATE: Convenes at 2 p.m.

KOSKINEN: ‘I DON’T THINK AN APOLOGY IS OWED.’ Our Rachael Bade wraps up the news from Friday’s House Ways and Means Committee hearing on the lost IRS emails: IRS Commissioner John Koskinen “refused to apologize for the loss of ex-IRS official Lois Lerner’s emails, and said the agency produced what they could, at a combative hearing marked by accusations by Republicans of IRS deceit. … ‘I don’t think an apology is owed,’ Koskinen told Ways and Means Chairman Dave Camp after the Republican lawmaker asked for one at the first hearing on the email issue.”

“Democrats said there was no evidence of bad faith, but the GOP accused Koskinen of hiding the missing emails from Congress, saying the agency and the White House knew for months there was a problem before they told the Hill. They chastised him for not mentioning it during several appearances before Congress this spring. ‘You can blame it on a technical glitch, but it is not a technical glitch to mislead the American people,’ Camp said. ‘What you have lost is all credibility.’” Read on: http://politico.pro/1igAwLh

HOPE YOU DON’T HAVE DINNER PLANS: THERE’S ANOTHER LOST EMAILS HEARING. The House Oversight Committee holds its own hearing tonight with Koskinen. "IRS Obstruction: Lois Lerner's Missing E-Mails, Part I" kicks off at 7 p.m. in 2154 Rayburn. Issa sent Koskinen a letter Saturday asking him to prepare to answer 15 tech questions, and the agency’s “e-mail systems, data retention policies, and document production processes. Because the IRS has refused to provide basic information about these matters to the Committee in advance of the hearing, and in the interest of promoting a frank and thorough discussion at the hearing, I ask that you provide answers to the factual questions posed below," including explaining the failure of the hard drive on Lerner's computer, identifying "all IRS employees who had any responsibility or role in maintaining or servicing IRS e-mail exchange servers between 2009 and the present" and naming all vendors and outside contractors used by the IRS for tech purposes, among others.

And just in time for tonight’s showdown, the committee on Friday launched a new site to track its IRS investigation. From the “About” page: “The IRS Targeting Investigation site was built to centralize information about the Oversight Committee's investigation into the targeting of conservative groups by the IRS and make it easier for the public to understand the progress of the investigation.” Click here to check it out, and be greeted by a giant picture of Lois Lerner: http://1.usa.gov/1yt6okq

PAULSON CALLS FOR A CARBON TAX. Former Treasury Secretary Hank Paulson has a piece out in The New York Times pushing for a carbon tax. Paulson, who calls climate change “a crisis we can’t afford to ignore,” writes that “we need to act now, even though there is much disagreement, including from members of my own Republican Party, on how to address this issue while remaining economically competitive.”

“The solution can be a fundamentally conservative one that will empower the marketplace to find the most efficient response. We can do this by putting a price on emissions of carbon dioxide — a carbon tax. Few in the United States now pay to emit this potent greenhouse gas into the atmosphere we all share. Putting a price on emissions will create incentives to develop new, cleaner energy technologies.” Read on: http://nyti.ms/1iXHsHO

IT’S HARD OUT THERE FOR A PRIVATE SWISS BANK. The Financial Times reports, “Owners of Swiss private banks are finding it hard to escape the reach of the US Department of Justice’s inquiry into tax evasion, even after they sell out. The Italian insurer Generali is close to a deal to sell BSI, its Swiss private bank, but it has agreed to keep exposure to any DoJ penalty even if a settlement with US authorities is agreed after the planned disposal, according to people familiar with the matter.” http://on.ft.com/1nvxzDQ

HILLARY CLINTON: ‘WE PAY ORDINARY INCOME TAX.’ POLITICO’s Maggie Haberman reports, “Republicans slammed Hillary Clinton on Sunday for an interview with the British newspaper the Guardian in which she said she and her husband pay full income taxes unlike ‘a lot of people who are truly well off,’ and added that voters ‘don’t see me as part of the problem.’” http://politi.co/1pAJxzw

LOST EMAILS SPARK ARCHIVES INQUIRY. The National Archives and Records Administration has opened an inquiry into the IRS’s lost emails. NARA “was concerned to learn that the IRS has lost email due to a hard drive failure. The Office of the Chief Records Officer for the U.S. Government has contacted the IRS to explore specifics of the situation,” a spokesperson said in a statement to Morning Tax. NARA “issues policies and regulations regarding the management, retention, and disposal of email and all Federal records,” the spokesperson noted.

INVERSION FEVER. The Wall Street Journal reports, “Drug maker Shire PLC of Ireland on Friday rejected a $46 billion takeover bid from U.S. rival AbbVie Inc. the latest attempt by an American company to buy a foreign address and the tax advantages that come with it. Such so-called inversions have become a popular structure for a wide range of American companies seeking lower corporate tax rates and a way to deploy overseas earnings that would otherwise be subject to stiff U.S. taxes if repatriated. The tactic has become popular among pharmaceutical companies in recent months as that industry scrambles to reshape itself amid rising pressure on health-care spending and a number of patent expirations that threaten revenue growth.” http://on.wsj.com/TlsULH

—The Financial Times reports, “Plans to recruit dozens of new judges have been drawn up to cope with a wave of litigation expected in response to a £7bn crackdown on tax avoidance that starts next month.” http://on.ft.com/1pYOCU3

Authors:

About The Author

Mackenzie Weinger is a POLITICO Pro Tax reporter. She graduated with honors in 2010 from UC Santa Barbara with a B.A. in history. She spent four years working for the student newspaper, the Daily Nexus, serving as editor-in-chief in her senior year. Before joining POLITICO, Weinger interned in D.C. at National Journal’s The Hotline and at Roll Call. She has also written for Calbuzz, a website focused on California politics, and interned at Anthem Press, an academic publishing house in London.

Weinger is a native of Los Angeles and a die-hard Lakers fan who enjoys studying history and winning pub quizzes.